This article is reposted from the July 21, 2010 edition of National Jeweler and is written by Jan Brassem.

Prepare yourself, jewelers. Here comes Generation Y (aka Gen Y), 74 million big-spending consumers, born between 1978 and 1995, who inspired a recent Gen Y Forum purported to be “the largest gathering of prestige marketers in North America.”

The forum’s official goal was to discuss the “characteristics, influence and brand affinities of tomorrow’s affluent consumers.”

In other words, the aim was to determine how Gen Y consumers make buying decisions–an ambitious task indeed.

In case you didn’t know, the 74 million Gen Y members purchase, directly or indirectly, $200 billion worth of goods or services a year, five times more than their parents did at the same age.

There are now more Gen Y members than there are baby boomers, and this demographic will represent 50 percent of the total U.S. workforce by 2015. Oh, did I mention that within the next five years, the Gen Y consumer will provide the biggest revenue source for any industry you can name?

The forum consisted of 22 thought-leaders from diverse fields, including a bureau chief for The Economist, the publisher of Teen Vogue, the chief of digital marketing for Microsoft and a member of the U.S. State Department, among others.

All of these “rainmakers” agreed that Gen Y members are technologically sophisticated shoppers who were probably using computers before their first day of school.

The computer became the “training wheels” for this group, which is often called the “Internet Generation.” It was also clear among the forum leaders that the technologically adept Gen Y consumer would make purchasing decisions using high-tech tools.

In a nutshell, here’s a rundown of some of the important points discussed. (The college marketing students I teach will wrestle with the rest.) Much of the information discussed at the event is the result of extensive U.S. and international market research.

Speedy decision-making: “Business will be as usual, but much faster,” was a common theme at the meeting. Simply put, the shopping process goes something like this: They click, they browse, they buy. It will be the retailer’s responsibility to keep up.

Design trends: Product design can no longer be developed by committees, research teams or in staff meetings. Such groups take too long to reach consensus, and styles change too fast. What a company should do is develop a network of blogs and tweets to inform styling decisions. Besides being inexpensive, these interactive forums allow for speed and dexterity.

An investment: Gen Y consumers see luxury products as investments, not as indulgences. They do not have an appreciation for “trendy” styling, and favor more “classic” designs. When they purchase an item, they generally use it. (It will not be placed in a drawer.) They expect exceptional quality.

Parents as reference: These young consumers consider themselves to be “equal opportunity buyers,” with an unspoken motto that “We buy the same as our parents, except … we want more.” Heritage plays no part in design, styling or reference decisions. While their parents considered luxury to be something special, Gen Y consumers understand luxury as something that they deserve.

Bling is blung: Ostentation is clearly out, and subtlety is in. Gen Y jewelry consumers seek simple designs that are cool, hip and “in the know.” Some visual expression is important, but it is not key.

Purchase rationale: Gen Y consumers have a need to add an emotional rationale to their buying decisions. For example, when purchasing a pendant, the shopper requires–as a rule–an additional use for the piece. She wants to be able to wear it to work, and to a party.

Reference groups: Positive feedback, (real or imagined) from their reference group is arguably Gen Y’s most important decision criteria. Whomever their peer group is–be it colleagues, friends, or fellow club-goers–acceptance by that group will close the sale.

Sale vs. deal: Beware of putting items on “sale.” Gen Y consumers consider that word to be the radioactive kiss of death. They strongly prefer the word “deal” as a way to communicate bargains or price reductions. Getting a great deal sounds–to their ears, anyway–better than getting something on sale.

Blogs and more blogs: The new–and hopefully permanent–Internet-based marketing vehicle is the blog. The blog is inexpensive to set up and maintain and its uses are abundant. Almost in unison, the thought-leaders at the forum expressed the conviction that blogs were the marketing tool of tomorrow–if not today. To be a successful Internet “player,” your store or site should be called out on a minimum of 25 blogs today and at least 250 in the future.

For those who are not Gen Y members, your knowledge of technology may be strained. Mine was. It is our job to become current in this technology and understand the negative marketing implications if we don’t. Let’s face it, we could end up in the same category as hand-held calculators and in-store flyers.

A crisis requires an immediate action plan. You work through a crisis: you rebuild the house after a fire; you rebuild the city after a serious earthquake. We approach the crisis as having a beginning, a middle and an end-the light at the end of the tunnel, and we push through to emerge on the other side, knowing that we can rebuild it, we will rebuild it. In our industry, we have been addressing our current “issues” by applying crisis management. We cut our expenses, lowered our inventory and we are looking to introduce new merchandise that might address otherwise missed selling opportunities by attracting a new customer base. By taking these steps, all necessary by the way, we feel as if we are doing what we need to be doing to work through this crisis.

There are two things we cannot know at the beginning of any crisis: How long will this last and what does it look like on the other side. While our industry is indeed at some point on the timeline of the crises (actually, more than one in my opinion), we can only guess about how long they will last and what our industry will look like on the other side. That said, I don’t believe that we are merely dealing with a series of crises-I believe our industry will continue to shake for many months and perhaps years to come, just as the aftershocks of a serious earthquake. I believe this will be the time we will look back upon as the beginning of significant evolution.

Expect business as usual to look very different in 5 years. Banking related issues such as terms, memo and stock balancing may all be endangered species as our industry evolves. Marketing and advertising will have to consider enormous changes in demographics as the boomers retire and Millennials emerge (an even larger mass of humanity than the boomers). And this new group doesn’t read the newspaper or listen to the radio, they Tweet. They text. They post on Facebook. Every one of them has an IPod with 12,000 songs that they downloaded for free. They are connected 24/7 in ways that we, as an industry don’t even understand yet, let alone have addressed. I am not talking about advertising differences here; I’m talking about life style, life stage and two huge consumer bases. The former defined us for the past 50 years and the later will define us for the next 50. I’m talking about evolution.

I believe the changes that emerge will require a level of cooperation and transparency unlike anything our industry has ever experienced. Retailers will have to open up and communicate with their suppliers and suppliers will actually have to listen. Merchandising (an art form largely undervalued in our industry for the past two decades) will have to have a new found respect and merchandisers will emerge once again as having value. Brands, whatever that really means in our industry, will have to work cooperatively with their retail-partners or they will go extinct. The entire industry will have to learn how to manage their inventory and stop thinking of it as an asset!

These are the times when the earth moves, when mountains are formed, when there is a fundamental shift in the landscape-and it never goes back to the way it was. The JCK panel discussion “The Evolution of Our Industry” was conceived around the notion that the jewelry industry must evolve, like it or not. Ready or not. Many stakeholders in our industry are feeling the pain of the early rumblings of these changes, but like all other evolutionary cycles, what emerges should be more efficient. While we work through our own crises, let’s keep in mind that these issues are not likely to be short lived and that while one eye is working in the present, let’s keep the other focused on the future. After all, there are 86 million Millennials who would like you to be their jeweler.

If you will be in Vegas, please join us to hear the views of some of our industries forward-looking stakeholders as we address these issues. Ken Gassman, president and founder of the Jewelry Industry Research Institute, whose research is published by IDEX Online, will be the moderator of this panel. Panel includes: Phyllis Bergman, CEO of Mercury Ring, Kathy Corey, VP Merchandising at Day’s Jewelers, Richard Fields, Chief Strategic Officer at Unique Settings, Mark Michaels, Secretary and Treasurer of Michaels Jewelry, Nehal Modi, CEO of Gitanjali USA, Abe Sherman, CEO of BIG and Ron Spurga, Vice President of ANB Amro.

2009 has been a big year for social networking! Adults and businesses are flooding to the media for various reasons. National jeweler, a retail jewelry trade magazine, recently reported that Tiffany and Co jumped into this arena by adding a T&C facebook page. For the full article click this link:

The rapidly evolving world of social networks and blogs has officially grown up.

Last year, the largest increase in visitors to such “member community” Web sites came from those ages 35-49, according to a new report from The Nielsen Co.

“Social networking isn’t just growing rapidly, it’s evolving–both in terms of a broader audience and compelling new functionality,” said Alex Burmaster, author of the study and communications director across EMEA for Nielsen Online.

But grow rapidly it did. In 2008, over two-thirds (67%) of the global online population visited what Nielsen dubs “member communities,” which include both social networks and blogs.

That placed “member communities” as the fourth-largest online category, ahead of “personal email.”

What’s more, the category grew twice as fast as any of the other four largest sectors, including search, portals, PC software and email.

According to the Nielsen report, Facebook–which has now surpassed MySpace as the world’s most popular social network–was visited monthly by three in every 10 people online across the nine markets in which Nielsen tracks social networking.

In Brazil, meanwhile, Google’s Orkut social network had the largest domestic online reach–70%–of any social network in these markets.

Germany saw the greatest increase in penetration of social networks and blogs across 2008, from 39% of the online audience in December 2007 to 51% in December 2008–a relative growth of 39%.

In addition, mobile is playing an increasingly important role in social networking, according to Nielsen. U.K. mobile Web users had the greatest propensity to visit a social network through their handset, with 23%–or roughly 2 million people–doing so, compared to 19% in the U.S.–or some 10.6 million people.

This year, said John Burbank, CEO of Nielsen Online, “social networking will continue to alter not just the global online landscape, but the consumer experience at large.”

In today’s market place, it is possible to create a tribe of “fans of your brand” using some planning and the vast array of social networking tools. So what is the formula?
First, discern what makes your brand different. This is a very important challenge. Often it is you and your staff that makes up your business “DNA.” Think about these people not in term of who they are and what they look and act like, but in the unique talents they are. Begin to speak those talents until that becomes part of your store identity. If a staff person leaves, he or she takes their part of that identity with them. That does not mean that those talents aren’t replaceable. The important part is to create the recipe of talents you want your store to be and speak that recipe.
The second part of creating your jewelry tribe is living up to your promises and exceeding expectation. It is very important that everyone in your store understands the importance of all promises that are made. It is always better to not promise something and then be able to achieve the goal, than the reverse. Make your promises very carefully. Next is exceeding expectation. The current “bar” for expectation is very low and getting lower. Service is an expensive part of a business and is often a place that owners become cheap about. That is great news! To exceed expectation, you only need to be a little better that what the consumer is used to other places. In other words, your store can be pretty average and still exceed expectation, but this is not what I am advocating. I think your business service needs to shine! This makes your satisfaction level go “through the roof” and your customers become the best source of advertising you could ever have!
Now, it is time to create tribe! With the current social networking tools that are available, you create a “space” to connect all of your businesses advocates and let them tell your story. If you have done a good job on the first two steps, the third happens with very little encouragement. If you want to see what one of our (Krombholz Jewelers) spaces looks like and does, become a fan of Krombholz on facebook!